The Different Meanings of Formalisation. Experiments from the South: The Case of Argentina

Abstract

Informality is a structural feature of the labour market in developing countries. In Argentina, informal work regularly represents, at least, one-third of working people. During the ´90, informality rate arises to 35%, climbing up to 45% in 2002. Nowadays, as the result of various formalisation policies, informality rate decrees. Therefore, 34% of workers do not have any legal contract. The informal sector is constituted of three main groups: employees working in small business, own-account workers and domestic workers.Since 1990, many laws seek to formalise the situation of this workers. Formalisation became for the first time an important issue for labour law. However, the underpinning of formalisation changed during the time. Between 1991 and 2001, in accordance with the Washington Consensus, formalisation and flexibility became part of the same equation. All laws conforming the Labour Reform promote labour flexibility in legal forms. That means flexibility within the formal labour market. Since 2004, with the so-called "counter" Labour Reform, formalisation appears as the way to expand social protections. In line with ILO position, the main goal is to provide "decent work" to all workers.While motives justifying formalisation seems clearly differentiated in the two periods, the way in which formalisation was conceived by labour law and implemented appears more blur. From an historical perspective, this paper seeks to analyse different regulatory responses to informality. Analysing changes in labour law and in tax regulations, as well as parliaments debates, the main objective of this research is to study different legal experiments having the intention to formalise the situation of workers in the most precarious positions. The first one addressed own-account workers participating in informal labour market and employees working in small business. Thus, self-employed legal category was reshaped to include liberal professions as well as not qualified workers working part-time or even on occasional basis. The second experiment tried to attain paid domestic work formalisation. Using different strategies, the State tries to implement a new regulation that recognized domestic workers the same rights of all workers. These experiments at the margins of labour market are accompanying by other policies address to the core. In May 2014, a new law focused on formalisation and prevention of labour frauds was approved. Law 26.940 became the framework for improving old experiments and setting new ones. The paper will be organized into three parts. The first one will analyse when and how informality became an issue for labour law -instead to be conceived as a problem of labour law implementation-. The second part will focus on the study of renewing of self-employed worker category, and the third one, on the study of the new law on domestic work and its implementation. The conclusion will present the consequences of these experiments, giving some answers the two main questions proposed for this panel: what is the contribution of labour law to labour market segmentation? To what extent can labour law be structured to include workers who labour within the informal economy?